Also, we are not zoning the disk with the backup server as I want to make sure the backup server never sees the physical disk as a device where it could run the risk of messing something up.

Does Symantec require this to work? It does not mention it in their documentation if so. Come to think of it, short of mentioning how to install and configure the settings, it does not mention topology once in their documentation?

I agree. The netbackup host definitely needs SAN connectivity to the master. I do have it set this way already as well. This is needed for the basic media master communication.

I was finaly able to get a VMware tech in Symantec to take the case. He said "The VM-Ware documentation for Netbackup does not include everything. This was done intentionally as some of the set up is done from the VMware side, and if it is in our documentation, we must support it, and we do not."

Given this. He said that the SAN vmware host backup server needs to be zoned in the SAN fabric to see the shared HDD's the snapshots reside on. This was not given because it is not a good idea ... but it is the only way it will work. Originaly, Symantec said it just needed to see the ESX host in the zone, but now, they are saying it actually needs to see the physical LUN on the SAN to get read/write access to the HDD where the snapshots live.

I will be setting up a new zone that incorporates this and will let you guys know if it fixes the issue. Hopefully if it does, this can help many others as this question is all over the Internet without a proper resolution from Symantec, as they do not wish to get their hands dirty and include it in their VM-Ware guide. (They could of at least referenced a VMware backup guide made by VMware.)

Adding the host ESX machine to the same zone as your Host-Backup server does not help. You must zone in the physical disks on the SAN LUN so that your Host-Backup server can see them in the Disk Management snap-in. In order to do this, Add the LUN to a new (or existing) SAN zone within the SAN fabric.

After doing so, tell the Host-Backup machine to scan for new devices in the device manager snap-in. Then Check your Disk Management Snap-in to verify the disks are showing up. They should show up as basic discs without drive letters, just as if the SAN was sharing them to the machine to be mapped. (Do NOT map them).

Re-run the job, and it should now work as the Host-Backup server has full access to the physical hard disks that the snapshot resides on.

** My issue was that:
A) The Veritias / Symantec guide for configuring VM-ware did a good job at leaving the topology out.
B) Once I finally managed to get support, they told me to only zone the physical ESX machine and the Host-Backup server together.
C) Once I finally insisted to speak with a better tech, I was informed that I needed to share the physical Hard Disks of where the snapshot actually resides on with the Host-Backup Server. After doing so, the backup worked flawlessly. (15GB in under 10min from FC disk to LTO4 via 2/4 GB Fiber Channel.. Not to mention the new ability of being able to backup Virtual Machines a lot easier)

*Edit: Here is the link to the Symantec NetBackup 7.0 for VMware Guide. - http://seer.entsupport.symantec.com/docs/340112.htm
Helpful up to the point of the topology in which the above should help with.